Strategic Management – Meaning and Important Concepts

INTRODUCTION 

Strategic Management refers to a collection of activities carried out to identify and describe strategies. Such strategies are carried out by managers in order to achieve better performance. These strategies result in a competitive advantage for their organization. 

An organization is able to derive competitive advantage if its profitability is higher than the average profitability. This remains true for all companies in its industry.

DEFINITION 

Strategic management can refer to a bundle of decisions and acts. These decisions and acts are to be taken by a manager. These decisions play a pivotal role in determining the result of the firm’s performance. 

The manager must be able to set up a competitive organizational environment. In order to do so, the manager has to have thorough knowledge and analysis of environment. This allows him to take right decisions. 

SWOT ANALYSIS: STRATEGIC MANAGEMENT 

They should carry out a SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats), i.e., they should make best possible utilization of strengths, minimize the organizational weaknesses, make use of arising opportunities from the business environment and shouldn’t ignore the threats.

Strategic management emphasizes on planning for both unfeasible as well as predictable contingencies. Strategic management concerns both small as well as large organizations. Since even the smallest organization is facing competition, strategic management is becoming more important. 

And, by formulating and implementing appropriate strategies, businesses can gain sustainable advantage over their competitors.

BUSINESS OPPORTUNITIES WITH STRATEGIC MANAGEMENT 

Strategic management paves the way to strategists that determine the objectives. And, the objectives are to make sure that strategies are realized. Strategic management concerns making and implementing decisions.

The decisions are to dictate how an organization will run in the future. Business owners can identify the direction in which their companies are moving.

Strategic management follows a continuous pattern. The pattern assesses and controls the business and the industries in which an organization is involved. An organization can evaluate its competitors and sets goals and strategies accordingly. 

This allows organizations to face all existing and potential competitors. Business owners then reevaluate strategies on a regular basis. Strategies reevaluated allow businesses to determine how it has been executed.

Additionally, organizations can determine whether a strategic movement was successful or does it needs replacement.

Strategic Management gives a broader perspective to the employees of an organization and they can better understand how their job fits into the entire organizational plan and how it is co-related to other organizational members. 

It is nothing but the art of managing employees in a manner, which maximizes the ability of achieving business objectives. The employees become more reliable, more dedicated, and more satisfied as they can co-relate themselves very well with each organizational task. 

Businesses need to understand the reaction of environmental changes and its impact on the organization. If they do, they can deliver the probable response of the organization. Of course, this result is attainable with the help of strategic management. 

Thus, the employees can evaluate such changes and their impact on their own job. By making proper evaluation, employees can effectively meet the changes. The managers and employees should make coordinated efforts for appropriate things in appropriate manner. 

The efforts need to be both effective as well as well organized. One of the major roles of strategic management is to integrate various functional areas of the organization completely. The organized effort makes sure these useful areas synchronize and get together well.

Another role of tactical management is to manage the goals and objectives of the organization.

IT LEADERSHIP AND MANAGEMENT 

How to be a collaborative and strategic IT leader: a brief explanation 

The strategic management process involves management techniques used to plan for the future. Organizations develop long-term strategies with intention of creating a vision. This helps identify necessary processes. Moreover, business allocate resources to achieve those goals. 

Strategic management also helps companies strengthen and support their core competencies. By determining a strategy, organizations can drive logical decisions. With logical decisions, businesses develop new goals quickly. The new goals keep pace with the changing business environment. 

Strategic management can also help an organization gain advantage over their competitors. This lets businesses improve market share.

SWOT Analysis

A SWOT analysis is a vital element to employ strategic management. SWOT analysis helps companies identify their strengths, weaknesses, opportunities, and threats. The SWOT analysis helps detect and factor in internal and external environments and other factors.

These factors may determine how the business operates. And, the factors will allow organizations to prepare for the future. Additionally, decision-makers analyze key aspects of their organizational environment to help formulate competitive strategies.

THE DEFINITION OF SWOT 

  • Strengths
  • Weaknesses
  • Opportunities
  • Threats

The SWOT analysis allows businesses to determine whether the firm’s resources and abilities will be effective in the competitive environment. The competitive environment allows businesses to function. And, the SWOT analysis allows businesses to develop their goals and strategies. 

This helps businesses remain successful in this environment.

SUMMARY 

The value of organizational culture in strategic management is immense. Organizational culture significantly determines the success and failure of a business. The culture works as a key component that strategic leaders consider. The component allows businesses to develop a dynamic environment. 

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